KPCU lost Sh727m to receivers, say former directors

Ousted directors of the Kenya Planters Co-operative Union have claimed that assets worth Sh727 million have either been looted or vandalised by the receiver managers.

The directors also claimed that Co-operatives Development minister Joseph Nyaga and the Commissioner of Co-operatives’s decision to set up an interim board to oversee the affairs of the giant farmers’ union was an attempt to cover up the alleged theft.

Eight former directors, led by chairman Kimathi Mutuerando, told Parliament’s agriculture committee that the Minister planned to appoint a new managing director “to cover up the looting and oversee the disposal of KPCU assets.”

They claimed the Commissioner of Co-operatives, Fredrick Odhiambo, flouted the law and contravened a court order barring interference with the running of KPCU.

The former directors said the purported elections of the interim board comprising seven members on July 20, 2012 by coffee farmers, cooperative societies and estates was against a court order restraining the commissioner from interfering with KPCU’s activities.

The new interim directors were elected during a Special General Meeting convened by the commissioner. They were to look into the resolutions of the shareholders on the revival strategies and review the union’s by-laws and articles of association, together with organising the election of a substantive board and disposal of pending court cases.

After the elections, which the old board said yesterday contravened the law, Nyagah said the board would work on strategies geared towards settling outstanding debts from its creditors totalling Sh3.7 billion, which led to its being placed under receivership in 2009.

Mr Mutuerando yesterday told the committee chaired by Naivasha MP John Mututho that milling machines, hullers and graders had been vandalised in all the 14 KPCU branches countrywide.

He cited its Nairobi Ghala House headquarters, Dandora, Sagana and Nakuru as the most affected. He said the computers and back-up equipment had been stolen from the Dandora depot.

“We have come to you on short notice to report that KPCU machines are being looted and vandalised under the watch of the receiver managers who kicked us out in 2010,” said Mr Mutuerando, who led directors from Thika, Muranga, Sagana, Machakos and Meru to a crisis meeting with the committee.

He said before the team was ejected by the receiver mangers appointed by Kenya Commercial Bank to recover its loan, the board conducted a forensic audit of its mills through Euro Afric Industries Engineering and also a valuation report of its assets.

They tabled a report of the audit that was done by Tysons Limited.

“When the receiver came in, the machines were there. But they have been vandalised and a case in point is Ghala House where a lorry full of vandalised equipment was intercepted and detained at Kamukunji Police Station. We reported the matter under OB No. 99/20/3/2012,” said the former chair.

He said the security personnel who were arrested, together with the lorry driver and thevehicle carrying vandalized machinery was released.

The committee said it would summon the Commissioner of Police ,Mathew Iteere, Kamukunji OCS, the minister and the commissioner to appear before it next week to shed light on the allegations of theft of equipment belonging to the union
emutai@ke.nationmedia.com